Welcome to our life insurance calculator hub. Here you will find a free, online calculator tool that can help you work out how much life insurance cover you need and how much a policy of that amount would pay out if you were to pass away during the cover period.
You can find our life insurance calculator at the top of this page. Run some numbers yourself then get in touch for bespoke advice about your next step from our insurance experts.
What our life insurance calculator can tell you
You can use our life insurance calculator (above) to work out how much life cover you need based on what you need the pay out to replace. For example, you calculate how much protection you would need to cover any mortgage payments, debts and/or your income.
This tool can also give you an idea of how much a policy of that size would pay out, depending on when you pass away within the confines of it.
You can compare how the payout amounts would vary across the three payout type options available in the UK: level term cover, increasing cover, and decreasing cover.
How this calculator works
There are two parts to our life insurance calculator and each can provide you with a key piece of information about your policy.
The first part can help you work out how much coverage you need. Simply select what you want the payout to cover in the event of your death from the following options provided:
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Outstanding mortgage balance
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Other debts
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Income
The tool will then combine the amounts you have entered to estimate how much your beneficiaries would need a life policy to pay out to cover the total.
You can opt for complete, comprehensive coverage by inputting figures for all of the above, or pick and choose which expenses/income you want the safety net to protect.
Calculating your payout
In addition to helping you work out how much coverage you need, our life insurance calculator can tell you how much your policy will pay out. The size of your payout will depend which payout type you selected, the options being level, increasing or decreasing term.
The calculator gives you the option to output results for each type and they work as follows:
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Level term: Pays out a set amount regardless of when you die within the term.
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Decreasing term: Pays out an amount that reduces by a set percentage each year of the policy. Our calculator sets the percentage at 7% by default but this can be manually changed.
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Increasing term: Pays out an amount that increases during each year of the policy to combat inflation. We have set the default amount at 4% but this can be manually changed.
Decreasing term policies are most commonly taken out to pay off a debt that is gradually shrinking over time, most commonly a mortgage, and is usually the cheapest of the three types, while increasing term is the most costly.
Why use this calculator?
There are several reasons to use our life insurance calculator as a starting point on your protection journey. It can be useful for the following purposes:
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Offering rough estimate of the cover amount you need
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Providing an estimate of the potential payout
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Comparing policy sizes based on the cover amount you choose
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Comparing payout amounts across different term types
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Doing research as part of broader estate planning
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Comparing payouts across different term lengths
Although our calculator is a very useful starting point for your initial research, all online calculators have their limitations. For example, it is difficult to calculate the cost of a life insurance policy without professional advice as so many variables are assessed.
Moreover, all online calculators only produce rough estimates. For bespoke calculations that are personal to you, get in touch below to speak to a life insurance adviser.
Get bespoke life insurance quotes and advice today
Example calculations
In this section, you will find example life insurance calculations produced by this calculator.
Coverage amount calculations
Scenario 1: The First-Time Buyer (Mortgage Focus)
This user has likely just taken out a 25-year repayment mortgage. They want a "Level Term" policy to ensure that if they pass away, the house is owned outright by their partner.
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Policy Length: 25 Years
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Category |
Input Amount |
Logic |
|
Mortgage Payoff |
£325,000 |
Average UK mortgage for a semi-detached. |
|
Income Replacement |
£0 |
Not selected (relying on partner's wage). |
|
Other Debts |
£8,000 |
Personal loan for home renovations. |
|
Total Coverage Recommended |
£333,000 |
Scenario 2: The Young Family (Income & Debt Focus)
In this scenario, the user wants to ensure their children are supported until they finish university. They’ve chosen to replace a portion of their salary to cover rising utility bills and school costs.
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Policy Length: 20 Years
|
Category |
Input Amount |
Logic |
|
Mortgage Payoff |
£0 |
Already covered by a separate policy. |
|
Income Replacement |
£400,000 |
£20k/year for 20 years. |
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Other Debts |
£12,000 |
Car finance + funeral cost buffer. |
|
Total Coverage Recommended |
£412,000 |
Scenario 3: The "Total Security" Plan
This is the most comprehensive approach, often used by the primary earner to clear all UK-based liabilities and provide a long-term cushion.
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Policy Length: 30 Years
|
Category |
Input Amount |
Logic |
|
Mortgage Payoff |
£275,000 |
Existing mortgage balance. |
|
Income Replacement |
£500,000 |
10 years of a £50k "comfort" salary. |
|
Other Debts |
£20,000 |
Credit cards and overdrafts. |
|
Total Coverage Recommended |
£795,000 |
Example payout calculations
To understand these tables, it's important to note how the Death Benefit (the payout) behaves over time. For these examples, we will use a 25-year term with an initial coverage amount of £300,000.
Comparison Table: Payout Value Over Time
This table shows what the family would receive if a claim were made at different stages of the policy.
|
Policy Year |
Level Term Payout |
Decreasing Term (7%) |
Increasing Term (4%) |
|
Year 1 (Start) |
£300,000 |
£300,000 |
£300,000 |
|
Year 5 |
£300,000 |
£221,800 |
£350,958 |
|
Year 10 |
£300,000 |
£154,200 |
£427,318 |
|
Year 15 |
£300,000 |
£107,300 |
£520,311 |
|
Year 20 |
£300,000 |
£74,600 |
£633,594 |
|
Year 25 (End) |
£300,000 |
£51,800* |
£771,460 |
What to do after running your calculations
Our life insurance calculator is a great place to start for some quick estimates, but what you need next is bespoke calculations, tailored quotes and expert advice to ensure you get the right cover.
Our expert protection insurance advisers can assess your needs and help you find the most suitable life insurance policy tailored to your situation. They also have direct relationships with insurers, meaning they can get you deals not advertised elsewhere.
Here are some more of the reasons people choose us to find them the best life insurance policy:
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We can get you tailored quotes in minutes
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Our advisors have 5-star ratings on leading review sites
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Your first chat is free with no obligation to proceed
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Access to exclusive life insurance deals
Ready to take advantage of a free, no-obligation chat with an advisor who specialises in life insurance policies? Get started here.
FAQs
It is difficult to calculate the exact cost of a life insurance policy without professional advice because insurers assess a wide range of personal variables. These typically include your age, health, lifestyle, and the specific type of cover you choose. For a bespoke calculation tailored to your personal circumstances, it is best to speak with a life insurance adviser.